[Reader-list] The Original Friedman

[aasim khan]

Hi all.

The man who advised Pinochet and campaigned for
legalisation of marijuana is dead. 

Many believe he was the man who turned Chicago School
into the power capital of the new world.

A small obit from The Independent:


------------------------------------------------------
Milton Friedman, free-market economist who inspired
Reagan and Thatcher, dies aged 94

Milton Friedman, the Nobel-winning monetarist
economist who was an intellectual architect of the
free-market policies of Republican US presidents, and
an adviser to Margaret Thatcher when she was Prime
Minister, died yesterday in San Francisco. He was 94. 

Over half a century, Mr Friedman, the son of Hungarian
Jewish immigrants, established himself as arguably the
most influential economic thinker of his time. Over
that post-war period, "Friedmanism" - the belief that
changes in money supply dictate fluctuations in the
economy - supplanted Keynesianism as the dominant
economic philosophy of the industrial world.

Inflation, he believed, was caused by too much money
chasing two few goods. Conversely, deflation was the
result of too little money in the economy. He argued
that the Depression was not a failure of capitalism,
but of government, as the monetary authorities in the
US and Europe reduced liquidity in the system, thus
making a bad situation worse.

As Mr Friedman celebrated his 90th birthday in 2002,
Ben Bernanke - then a Federal Reserve governor, now
chairman of the US central bank - sought belated
forgiveness for the error: "Regarding the Great
Depression, you're right," Mr Bernanke acknowledged.
"We did it. We're very sorry." Those monetary beliefs
underpinned the 30-plus books that appeared under his
name, most notably perhaps A Monetary History of the
United States, 1867-1960, as well as a host of other
writing including a regular column in Newsweek
magazine. He urged deregulation and individual
initiative as the keys to economic success - a view
embraced by the US presidents Nixon, Ford and Reagan,
and by Mrs Thatcher in Britain.

Mrs Thatcher said: "Milton Friedman revived the
economics of liberty when it had been all but
forgotten. He was an intellectual freedom fighter.
Never was there a less dismal practitioner of a dismal
science. I shall greatly miss my old friend's lucid
wisdom and mordant humour."

Friedman, and the "Chicago School" of economics he
led, helped to bring down the post-war Bretton Woods
system of fixed exchange rates, as the dollar was
devalued twice in the early 1970s.

In 1976 he was awarded the Nobel Prize for Economics.
In subsequent years, the Fed and other central banks
adopted his prescription of rigorous control of the
money supply to stamp out the inflation left by the
1970s oil-shocks.

His laissez-faire philosophy extended beyond
economics. Mr Friedman was a fierce opponent of the
military draft, and called for the decriminalisation
of prostitution and drug use. He courted controversy,
not least when he and other Chicago School economists
advised Augusto Pinochet in Chile, after the overthrow
in 1973 of Salvador Allende, the democratically
elected president. Mr Friedman defended himself by
pointing to the ultimate fall of General Pinochet.
"Freer markets lead to free people," he said.

"It's hard to think of anyone who's had more of a
direct influence on social and economic policy in this
generation," Professor Allan H Meltzer of Carnegie
Mellon University, who is preparing a two-volume
history of the Fed, said yesterday. 

Milton Friedman, the Nobel-winning monetarist
economist who was an intellectual architect of the
free-market policies of Republican US presidents, and
an adviser to Margaret Thatcher when she was Prime
Minister, died yesterday in San Francisco. He was 94. 

Over half a century, Mr Friedman, the son of Hungarian
Jewish immigrants, established himself as arguably the
most influential economic thinker of his time. Over
that post-war period, "Friedmanism" - the belief that
changes in money supply dictate fluctuations in the
economy - supplanted Keynesianism as the dominant
economic philosophy of the industrial world.

Inflation, he believed, was caused by too much money
chasing two few goods. Conversely, deflation was the
result of too little money in the economy. He argued
that the Depression was not a failure of capitalism,
but of government, as the monetary authorities in the
US and Europe reduced liquidity in the system, thus
making a bad situation worse.

As Mr Friedman celebrated his 90th birthday in 2002,
Ben Bernanke - then a Federal Reserve governor, now
chairman of the US central bank - sought belated
forgiveness for the error: "Regarding the Great
Depression, you're right," Mr Bernanke acknowledged.
"We did it. We're very sorry." Those monetary beliefs
underpinned the 30-plus books that appeared under his
name, most notably perhaps A Monetary History of the
United States, 1867-1960, as well as a host of other
writing including a regular column in Newsweek
magazine. He urged deregulation and individual
initiative as the keys to economic success - a view
embraced by the US presidents Nixon, Ford and Reagan,
and by Mrs Thatcher in Britain.
Mrs Thatcher said: "Milton Friedman revived the
economics of liberty when it had been all but
forgotten. He was an intellectual freedom fighter.
Never was there a less dismal practitioner of a dismal
science. I shall greatly miss my old friend's lucid
wisdom and mordant humour."

Friedman, and the "Chicago School" of economics he
led, helped to bring down the post-war Bretton Woods
system of fixed exchange rates, as the dollar was
devalued twice in the early 1970s.

In 1976 he was awarded the Nobel Prize for Economics.
In subsequent years, the Fed and other central banks
adopted his prescription of rigorous control of the
money supply to stamp out the inflation left by the
1970s oil-shocks.

His laissez-faire philosophy extended beyond
economics. Mr Friedman was a fierce opponent of the
military draft, and called for the decriminalisation
of prostitution and drug use. He courted controversy,
not least when he and other Chicago School economists
advised Augusto Pinochet in Chile, after the overthrow
in 1973 of Salvador Allende, the democratically
elected president. Mr Friedman defended himself by
pointing to the ultimate fall of General Pinochet.
"Freer markets lead to free people," he said.

"It's hard to think of anyone who's had more of a
direct influence on social and economic policy in this
generation," Professor Allan H Meltzer of Carnegie
Mellon University, who is preparing a two-volume
history of the Fed, said yesterday. 



		
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